Agricultural economics experts are anticipating reduced uncertainty in trade and global markets
By Jackie Clark
Experts on agriculture, trade and economics contributed to a special edition of the Canadian Journal of Agricultural Economics, exploring the potential impact of the Biden presidency on Canadian agriculture.
A predominant theme in the special edition was the anticipation of reduced uncertainty, Dr. Alan Ker told Farms.com. He’s a professor in the department of food, agriculture and resource economics at the University of Guelph and managing editor of the journal.
“In contrast to the Trump presidency, there’s expectation that there isn’t going to be near as much uncertainty in the export and import markets for Canadian producers,” Ker explained. Trump created uncertainty in world markets “directly through wanting to renegotiate NAFTA to CUSMA, as well as interactions with China and the trade wars.”
Those actions led to volatility for Canadian producers who export to those global markets.
“The amount of political uncertainty brought into world markets should decrease significantly under the Biden presidency. Or it’s hoped that it will,” he added. Additionally, “the Trump presidency, in ways, sought to undermine international institutions like the World Trade Organization, for example, which governs a lot of agriculture trade. And we don’t expect that with the Biden presidency.”
Some lasting impacts of Trump’s tenure exist.
Considering CUSMA, “the new deal wasn’t that much different than the old deal, despite all of the political noise out of the Trump presidency,” Ker said. “But we certainly have a new agreement and that’s something that’s going to be lasting.”
An additional lasting impact of the previous presidency are the high levels of subsidies paid to U.S. farmers, and the effect on Canadian farmers.
“A lot of U.S. government direct support to the farmers increased over the last two or three years because of COVID and the trade wars … whether that will continue or not under the Biden presidency, we’re not sure,” Ker said. “I have a hard time imagining it’s going to continue at the same level.”
Some uncertainty still exists around Canada’s relationship with China, somewhat influenced by the relationship of both countries with the U.S.
Political disagreements between the countries don’t centre on agriculture, however, “agriculture trade is highly affected through (changes in) exports and imports of commodities to make political statements,” Ker explained. That tension “doesn’t seem, at least to me personally, to be completely alleviated with the new presidency.”
However, overall “there’s a lot more certainty now than what there was two years ago,” he added.
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